President Obama has released his new budget, a $3.77 trillion fiscal roadmap intended to bring Republicans to the bargaining table. It has infuriated Democrats and Progressives with cuts to the social safety net -- I am talking about Social Security and Medicare -- that no Republican president has ever been able to achieve (assuming it passes).
The budget administers heavy doses of fiscal drag and it is stingy on spending and investment in sorely needed areas such as infrastructure, education, science and research. It includes new revenues as well as spending cuts. It is a product of our national obsession and irrational fear of the deficit and the belief that the U.S. can go bankrupt, which is impossible. I've covered this topic a lot so I'm not going to get into it again now. Suffice it to say, most people believe that the federal government can go broke and that has created a political environment that Obama has exploited.
The funny thing is, even the most hardcore fiscal conservatives know this is not true. They know the U.S. can't go broke, but they continue a campaign of fear mongering. Back in 2008, I interviewed former U.S. Comptroller General David Walker on my radio show. He admitted to me, on the air, that when it came to Social Security, the checks won't bounce. Here's the "Deficit Hawk in Chief" admitting that his whole campaign to ensure the solvency of Social Security was a lie.
Then there was Alan Greenspan, who gave Paul Ryan a proper schooling on fiat money systems and sovereign debt back in 2005, when he said that the U.S. government can always pay -- it was just a question of whether or not we had enough real assets to feed, house and care for our seniors. In other words, it was a question of productivity, not money.
Obama, on the other hand, has decided to ignore these facts. He has chosen to abrogate leadership when it comes to the truth about deficits and government spending. Instead, he takes the meek yet politically expedient route and tells people that the government is like a household and it has to cut back and people must sacrifice. Meanwhile, many have already sacrificed a lot.
The president has been blamed for many things: a weak recovery, higher taxes, being anti-business and being too liberal. These charges are undeserved. What Obama can be blamed for is a mindless and cruel adherence to a false and destructive propaganda campaign for no other reason than political expediency. Since most Americans believe the deficit is a concern, Obama can use that to make changes.
I'm not surprised that labor's share of national income has fallen faster than it ever did in history under this "anti-business" president.
Workers are being shortchanged, and the very person who promised to fight for them is helping to engineer and reinforce this trend like no president before.
Even though I'm not confident that the current trend will change, it is one of the best reasons to invest in the stock market. As long as we, as a nation, continue to enact policies that support big business and profits over labor and people, you must be an owner to reap the benefits. The easiest way to do that is by owning stocks.